In the December 2016 quarter, 24 per cent of the arterial network was congested during the morning peak. That's an 18 per cent spike over the same period in 2014.
But it also found that infrastructure improvements could claw back $1.3 billion of that cost.
The findings have sparked calls for urgent investment in new infrastructure projects, public transport and congestion charges to curb worsening delays.
Auckland mayor Phil Goff said traffic was getting worse by the day and, if anything, the $1.9 billion in losses was conservative.
"That doesn't take into account the social costs of lost recreation and leisure time, by people who find it's taking them hours to get home at night, and have to leave earlier in the morning.
"And it doesn't take into account the real, mounting frustration felt by Aucklanders."
Goff said he knew that frustration all too well.
He had to leave for work each morning at 5.45am, because if he left at 6.30am it would take twice as long.
In clear traffic his journey from South Auckland to the council offices took 30 minutes, but could stretch past two hours in bad traffic.
"We've got to look at some work on our road ways, but actually what we can do to make public transport a more accessible reality for more Aucklanders," Goff said.
Simply building more motorways was not the solution, he said.
"It's about busways, it's about light rail, it's about improving heavy rail services. It's about active modes of transportation, walking or cycling."
Goff said the council was already in talks with central government about what infrastructure projects could be brought forward, to ease the pain.
"We're working out the key spending areas, so it may be around the northwestern busway or it may be around the new Mill Rd highway south.
"It will certainly be around mass transport on the isthmus, because we're a gateway city and our gateway is becoming clogged."
Transport Minister Simon Bridges said talks with the council on what to do about Auckland's gridlock were well advanced.
"The Government is refreshing our Auckland Transport Alignment Project numbers with the council.
"Because of the stronger population growth that Statistics NZ is forecasting, that is going to see some projects shuffle forward.
Bridges' office released figures to the Herald, showing the newly opened Waterview Tunnel was already having an impact.
Today marks one month since the tunnel opened. The figures show 60,000 vehicles using it every day, and more than two million have travelled through it.
Bridges said that had dropped travel demand on State Highway 1 by 7 per cent.
Labour's transport spokesman Michael Wood said the report showed Auckland's congestion was among the world's worst.
"This is a disaster and underlines the need for fast, efficient public transport. The Government has done nothing to ease the congestion on Auckland's roads and this is now holding back our growth and prosperity."
KEY FINDINGS
• Gridlock is costing Auckland $1.9b a year, about 2 per cent of the city's GDP.
• The NZIER estimates $1.3 billion could be clawed back through better infrastructure.
• Average speed in morning peak traffic is 41km/h. If that was lifted to 56km/h, the Auckland economy would rake in an extra $3.5 million a day.
• Congestion is getting worse: a morning trip from Papakura to the city took an average 46 minutes in 2013, now an average 67 minutes.
Drivers quitting out of frustration
The stranglehold on Auckland's roads is making it a nightmare for those who drive for a living.
Hall's transport company executive director Grant Madill said the firm had to increase its truck fleet because the gridlock meant trucks couldn't manage the same number of trips in a day that they once could.
But the frustration of inching along in traffic meant the company was also finding it difficult to hire drivers, and losing the ones it had.
"We see the freight task increasing over the next 30-40 years, around 50 per cent," Madill said.
"If we haven't got our roading infrastructure sorted out well before then we're going to have some real problems."
Madill said the impact on his business was bad enough, but the pain was also spreading to customers, who were facing increased costs, as well as transport delays.
Madill said projects like the Waterview Tunnel were a good start, but a clear plan was needed for easing the choking congestion.